Insurance and licenses

The Doins paid $1,650 to transfer the New York State liquor license from the discount wine and spirits shop to Adirondack Wine Merchants. They also paid $400 to secure a federal liquor license from the Bureau of Alcohol, Tobacco, and Firearms (ATF).

Tina and Rob’s property insurance requires an outlay of $5,000 per year. The policy covers inventory loss as well as liquor liability should someone be injured after drinking alcohol purchased at the Doins’ store.

Computers and equipment

A laptop computer they picked up for $1,500 and accounting software with a $600 price tag were all Rob and Tina needed to set up their books. Down the line, they plan to sink $5,000 into an integrated software program to automate their accounting, inventory, purchasing, shipping and receiving, and point-of-sale procedures.

Other products and services

Telephone expenses at the store average about $100 per month. Utilities for the building, which has 3,200 square feet of floor space, amount to $1,000 per month. The Doins also budget $100 per year for subscriptions to trade journals and wine magazines such as the Wine Spectator.

In total, the Doins spent $777,215 to open for business:

Retail space (including real estate and remodeling) - $610,000
Opening inventory - $150,000
Payroll for first 30 days - $10,250
Marketing - $1,200
Licenses and first 30 days’ insurance - $2,465
Computers and equipment - $2,100
Other products and services - $1,200

Of course, every retail business is different, so it’s up to you, the resourceful entrepreneur, to put this real-world example to good use and create a smart financial projection for your startup costs and operating costs.   Just know that since a bricks-and-mortar business is such a costly type of startup business, understanding your budget well in advance is key to making sure you’ll have the funds needed when starting a business of this type.

Melissa Martin is a freelance writer for StartupNation.